Bitcoin fans find solace in idea it won’t always trade like tech
Bitcoin may be behaving even more like a tech stock in recent months, but crypto diehards are promising things aren’t always going to be like this.
The world’s largest cryptocurrency fell as much as 6.1% Tuesday to trade below $38,000, the lowest since mid-March, a move that closely mirrored the decline in the U.S. stock market, where tech stocks lost almost 4%. But Bitcoin won’t always behave this way -- soon, it will start to chart its own path, or so promises MicroStrategy Inc.’s Michael Saylor.
Traders right now think the coin is correlated to risk assets, so if they’re selling risk, they’re also selling Bitcoin. But, “it’s obviously not a tech stock -- it is actually the ultimate risk-off asset,” Saylor said during a CNBC interview.
“In time, over the course of 4, 5, 6, 7 years, everybody figures it out. But right now, the traders and technocrats control the market-trading of Bitcoin, and it’s a function of the tug-of-war between them and the mood in the market,” he said.
That Bitcoin hasn’t been able to map its own course in recent months is somewhat of an awkward fact in the crypto space -- the coin had for years been offered as an uncorrelated asset, one that’s not beholden to any governments and unlikely to be swayed by outside forces or factors.
But both tech stocks and Bitcoin have notched big swings this year as the Federal Reserve becomes less accommodative as part of its fight to combat inflation. That means that the coin could largely be seen moving up or down in the same fashion as stocks on any given day. The 90-day correlation coefficient of the coin and the tech-heavy Nasdaq 100 now stands above 0.60, among the highest such readings on record. (A coefficient of 1 means the assets are moving in
Read more on tech.hindustantimes.com
